Warner Music Considering Not Renewing Long-Term iTunes Contract

Discussion in 'MacRumors.com News Discussion' started by MacRumors, Oct 25, 2007.

  1. MacRumors macrumors bot


    Apr 12, 2001

    Warner Music Group may be the latest content provider to become increasingly restless with Apple's pricing terms according to The Washington Post.

    While the iTunes store undoubtedly saved a bleeding music industry, the same can not be said of TV and Movie content. One television studio has gone as far as to pull its content (NBC Universal). The Washington Post states that the difference lies in how TV has many more distribution outlets, whereas music had only 2 when iTunes came.

    However, now that music labels have broadened their distribution (example), even music companies appear to be drifting away from iTunes reliance. While none have outright pulled their music, Universal Music Group did not renew its long-term contract to sell songs on iTunes, pursuing rather a more flexible month-to-month option. The article indicates that Warner Music Group is also considering such a move, though no decision has been made.

    Still, iTunes represents a major player in music sales. According to the latest numbers, iTunes is the 3rd largest music retailer in the U.S.

    Article Link
  2. yoman macrumors 6502a


    Nov 11, 2003
    In the Bowels of the Cosmos
    Well. Maybe Apple will move to a more indie catalog and function as a pseudo label of thier own.
  3. Sceneshifter macrumors 6502


    Jun 14, 2007
    No surprise! iTunes was able to bully everyone around, but as soon as alternatives show their tail, customers are sure to look elsewhere
  4. mustang_dvs macrumors 6502a


    Feb 9, 2003
    Durham, NC
    I really don't get why content providers are looking to 'play hardball' with Apple by threatening to balkanize the legal distribution of digital music, especially when the iPod holds an 80% share of the market, and iTunes is, so far, the only digital music model to have shown steady profits and customer growth.

    You'd think that they forgot how they got into this mess in the first place.
  5. chr1s60 macrumors 68000


    Jul 24, 2007
    I don't fear music companies leaving iTunes and I don't think Apple should either. Pretty much everyone I know uses iTunes to buy their music these days. I can't even remember the last time I bought or went with someone to buy an actual cd either. Any music company that leaves iTunes will likely see a huge drop in sales. With the enormous number of iPods shipped every year it is obvious iTunes is the reasonable choice for all major music companies. Any company that decides to leave will most likely see a huge drop in online sales, but they will most likely come crawling back to Apple. Something a lot of companies might overlook is that iTunes is a trusted online music store. Most people will not buy from any random music store online, instead they want something trusted that is reliable and that just happens to be what iTunes is.
  6. Am3822 macrumors 6502


    Aug 16, 2006
    Groningen, The Netherlands
    If this sort of thing goes on, the iTunes store could turn out to be like those Soviet department stores --- rows upon rows of nearly empty shelves.
  7. megfilmworks macrumors 68020


    Jul 1, 2007
    Sherman Oaks
    How can Warner Music Group kick sand in the face of the number 3 music retailer?
    Apple will continue to grow, (10,000,000 iPods sold this quarter) and Warner (if they jump ship completely) will end up the big loser.
  8. nagromme macrumors G5


    May 2, 2002
    Yearly contract or no, and temporary posturing/withdrawals aside, the big content providers will keep dealing with iTunes because it makes them increasing amounts of money. And they'll deal with other online music stores too. Nearly all of which will flounder, but competition is good. The ones that emerge as successful will be those that move towards DRM-free and really high quality. Like Amazon MP3 Store, and especially iTunes. All of those songs will play on iPods and non-iPods alike, and can be managed through iTunes.

    Meanwhile iPods--Apple's real money-maker in music--will continue to sell through the roof. If anything, the emergence of other iPod-friendly stores like Amazon will HELP Apple, not hurt them. A major label could go ALL-Amazon and not iTunes and people would STILL buy iPods to play those songs.

    Now, if a major label goes all-Microsoft, all-Windows-Media, I don't expect that to work out well for anyone. It would be a short-lived experiment, and their catalog would then be back on the iPod (whether on iTunes or not). And Warner doesn't seem to be talking about anything even THAT serious--just a non-renewal of contracts and exclusives, not pulling of music from iTunes.

    The industry is changing, and Apple may not get yearly commitments as easily. But they'll still sell more iPods and more music downloads than ever before, they'll still get exclusive promo deals, and the whole situation will still get better and better for Apple AND for consumers AND for the music labels themselves--whether they fight the changes or not. And video content owners will come to catch on too.
  9. jaw04005 macrumors 601


    Aug 19, 2003
    These media companies are archaic. I guess they want everyone under 30 to go back to stealing music. Ridiculous.

    The vast majority of consumers are NOT going to stake out multiple online music distributors to get a specific artist or song.
  10. shen macrumors 6502

    Jun 19, 2003
    well, there it goes

    after 3 years of legal music downloads i might have to go back to file sharing. oh well.....
  11. johnee macrumors 6502a


    Can someone please enlighten me why these labels feel it's better to go month to month rather than long term? Do they have to pay any money to apple each month vs. a set fee? I have no idea how apple contracts with the labels....

    Is it simply to have the option to pull out ( :D ) whenever they want?
  12. LillieDesigns macrumors 6502


    Oct 18, 2005
    Los Angeles
    I can't wait until this bites all the record labels in the ass.

    I know if I want music I can go to a store and buy the cd or find it on iTunes. If it's not in one, it's in the other.

    If I go to buy a cd and it's in neither and they expect me to go searching for it on Amazon or Rhapsody or a personal store on their websites I'm going to be less inclined to pay for the cd.

    Keep it easy record labels, people do not want the hassle.
  13. P-Worm macrumors 68020


    Jul 16, 2002
    Salt Lake City, UT
    How exactly did iTunes bully everyone around? I can see how you would say that as far as the record companies are conserned because Apple obviously did a lot of the pushing, but how did iTunes bully the customer? :confused:

  14. ccreighton macrumors newbie

    Sep 11, 2006
    Houston, TX
    Change in the wind is good

    I think all the hoolaw is good for the industry. You have far more artists doing it their own way and cutting from the industry suits which is creating a lot of tension. Once the artists start realizing that they make more money on their own via digital distribution, things will change as they slowly are. Whether Apple has artists or not via the "industry" as a middleman won't matter. They set themselves up nicely for the next round of fights. Say goodbye to the bigwigs who steal most of the profit from the great artists. And the independent artists have already realized the potential or will if they haven't of doing things on their own. Apple with adapt to the changes accordingly, they always do...
  15. megfilmworks macrumors 68020


    Jul 1, 2007
    Sherman Oaks
    They want to be able to negotiate with other on line retailers and leave their options open for negotiations with Apple.
  16. Willis macrumors 68020


    Apr 23, 2006
    What feels like the middle of nowhere
    Im another who doesntunderstand why Music Labels are trying to get back at Apple and iTunes. Apple have done alot to save the music industry, but its a model that not everyone likes.

    Apple does develop its haters and in doing so, people will always try and boycot it.

    I rarely buy music online however because I like owning the actual Album with the cover, even though it gets burnt straight onto my comp and then my iPod. Bizarre but thats me.

    It is just one of those things I guess.
  17. triskadecaepyon macrumors newbie

    Aug 20, 2007
    I think a lot of companies are scared on the positions Apple is taking these days. DRM free and stuff... and the music labels are getting itchy for money. They think that their own distribution would be more profitible. But seriously... who would want to keep track of a universal music and warner music account and whatever their charges are?
  18. boss1 macrumors 6502a


    Jan 8, 2007
    Doesn't matter how you look at it or feel about it. Reality of it is that Apple is treading on a fine wire. iTunes is not God's gift to the world. It emerged at an opportune time but nothing lasts for ever.

    Compromise for longevity is a smarter move for Apple. You can't tyrant and demand allegiance to your rules when other avenues of relief are appearing to those you preach to.
  19. darksol360 macrumors newbie

    May 24, 2007
    In 6 months, all these companies are gonna be crawling back to iTunes...

    ...and Apple will have the upperhand. So, they'll leave, and then Apple will dictate how and how much they will be paying to return to iTunes, THE MOST POPULAR ONLINE STORE. Do they realize that they are shooting themselves in the foot? I know friends <ahem> that gladly paid a year pass for Heroes... now, its which BT has the best version for the Apple TV...
  20. RidleyGriff macrumors regular

    Jan 11, 2006
    The labels -- and networks and studios -- continue to demonstrate a complete and total lack of understanding of this market.

    The device -- the iPod -- drives the media sales. It is the platform. They will not hurt Apple's dominance by utilizing vendors like Amazon. Those who are successful will take the Amazon approach -- iPod compatibility is the main selling point. It is the "killer app" for any music service. This will only further entrench Apple on the hardware side, which in turn will make iTunes the most desirable music portal to an ever further degree, because of its convenience and integration.

    People want easy. They want a one-application approach. You don't get to be the #3 music retailer by appealing only to tech-savvy individuals; you get there by appealing to the entire market. Grandparents, kids, and tech savvy 20somethings and 30 somethings alike.

    The refusal to deal with TV and movies is doing only one thing -- stalling the growth of digital video. But as the HD-DVD fiascos have shown, there is no long-term vision in Hollywood these days, only desperate attempts to improve the bottom line for their current quarter. Which is understandable from a business perspective, but sets up film and tv studios to be in the same position the record labels find themselves now.

    With the iPod focus now firmly on video, consumers will find a way, legal or not, justified or not. They can either meet consumer demand, or face the consequences.

    Frankly, the labels trying to retrain consumers, or the studios trying to fool everybody that they don't want video on their iPods, but really only on their laptops, doesn't work, isn't working, and will continue to not work.

    Something eventually will give. If the mp3 music industry debacle has taught us anything, it is that the consumers will not be the ones giving anymore.
  21. waynesworldri macrumors newbie

    Oct 25, 2007
    two words, NBC U:

    bit torrent. enjoy hulu, for however long it lasts. :)
  22. Shadow macrumors 68000


    Feb 17, 2006
    Keele, United Kingdom
    I wasnt particulaly bothered when Universal (if it was them) jumped ship, but I am bothered about WB. If they do jump ship, I will be the first to download Limewire.
  23. WhySoSerious macrumors 65816


    Jun 30, 2007
    Dallas, TX
    All of you.......you're not looking at the big picture here!

    This is bad. Right now, iPods represent roughly 80% of the market. However, if music labels begin to abandon iTunes, then that means there will be less and less of a selction available on iTues for customers to purchase, which means less and less people will buy iPods because the iTune selection doesn't carry "their song", which means the customer will begin to buy brand-x MP3 player, which means less songs are purchased off iTunes, which means more label companies will drop because they aren't making money, which means less people buy iPods because "their song" isn't on iTunes......etc, etc.

    Not good Apple. Work it out, share a popscile. Play nice.
  24. Shadow macrumors 68000


    Feb 17, 2006
    Keele, United Kingdom
    Not sure about that...people buy iPods because they are good players not because of the store. A recent study showed that most of the music on iPods is pirated anyway (I think ;))....
  25. Blue Velvet Moderator emeritus

    Jul 4, 2004
    Let's not get too hysterical... wait, this is MacRumors. What am I saying? ;)

    So there it is. No decision. No news.

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